Investors opt for safety as political risk grows

Monday, April 10, 2017 - 01:51

Trading volumes were muted for many financial market assets with investors refraining from making big bets because of geopolitical tensions in the Middle East and the Korean peninsula. As Ciara Lee reports, there are also a dilemmas ahead for economists and policy makers later this week.

▲ Hide Transcript

▶ View Transcript

Holding back - investors refraining from making any big bets due to geopolitical tensions in the Middle East and the Korean peninsula.
Aides to President Trump differed over the weekend on where policy on Syria is headed after last week's strikes.
Asian stocks fell with MSCI's broadest index of Asia-Pacific shares outside Japan down for a third consecutive session
European stocks though showed modest gains with Germany's DAX and the UK's FTSE 100 both rising by 0.1pecent.
Markets seemingly unsure whether recent postive data outweighs political risks.
(SOUNDBITE) (English) COMMERZBANK, GLOBAL FINANCIAL ECONOMIST, PETER DIXON, SAYING:
"I think there will come a point where we'll have to say well all of the good news is priced in and markets probably won't continue to rise at the same pace, despite economic data because I think in many markets at least, pricing is beginning to look a bit toppy."
Politics in Europe is also set to dominate this week.
The euro edged lower and France's borrowing costs hit their highest level over Germany in six weeks.
The rise of far-left candidate Jean Luc Melenchon in polls making some fret.
But sentiment in the euro zone improved more than expected in April to remain at the highest level in almost 10 years.
Shrugging off risks linked with the election.
(SOUNDBITE) (German) HEAD OF CAPITAL ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING:
"No one is scared of the French election anymore. A Europe-friendly result can be expected. The euro zone economy is more robust than thought."
The dollar inched towards three-week highs largely on expectations of another a U.S. rate hike.
But while the White House's 'America First' policy is behind its stock market rally - U.S. investors are looking overseas for stronger earnings.
S&P 500 companies are expected this week to report their first quarter of double-digit profit gains since 2014.

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products: